“GIVE the domain name back!” That’s the order of the high court to an estate agent who was holding onto the address of an upmarket residential development in order to boost his sales.
The case, brought by Fairhaven Country Estate Pty Ltd, was heard by Judge Robert Henney in the high court, Western Cape, and judgment was delivered last week.
Target in Fairhaven’s litigation was estate agent Shaun Harris as well as G Studio, a branding company used by Harris and Fairhaven.
Fairhaven is now a flourishing development in Somerset West, but at the time Harris first became involved it was merely a dream, languishing in Nedbank’s portfolio of “distressed properties”.
During July 2011, in anticipation of the estate taking off, Harris registered the domain names fairhaven.co.za and fairhavenestate.co.za, and he later registered a number of other variations of the name “Fairhaven”.
When the property was bought by new owners they retained the name “Fairhaven” for the development and concluded an arrangement with Harris to help sell properties.
During 2014 that arrangement came to an end, and the two parties went their separate ways. Then, earlier this year, the director of Fairhaven, Zane de Decker, received an alarming email from G Studio.
G Studio informed De Decker that Harris had instructed the branding company that the Fairhaven domain name was his and that it was no longer available for the use of Fairhaven Pty Ltd. Harris instructed G Studio to transfer the Fairhaven domain name to himself with immediate effect.
The company told De Decker of the serious impact this would have on the marketing of Fairhaven estate, with all emails and the estate’s website going down. G Studio said that with just a 24 hour window before the transfer to Harris, Fairhaven would have to act promptly to register a new domain name to which all the marketing material would have to be transferred.
This conversation was the first time that De Decker knew Harris had registered the domain name for himself and that the company did not “own” its own domain name.
According to argument by Fairhaven, Harris had not informed them that he “owned” the domain name and the various variants. If he had done so when they first acquired the development they would not have used the name “Fairhaven” for the project, but would have chosen a name for which they could have acquired the domain names themselves.
While Harris had initially paid to register the names, Fairhaven had paid to renew the names every year and had also paid for the development of Fairhaven’s website that used the domain name.
When officials of Fairhaven heard about the instruction Harris had given to G Studio, they wrote to Harris and told him that the domain name and its variants were the vehicle through which all marketing of Fairhaven Estate was conducted and through which all email traffic relating to the marketing of the estate was channelled.
Harris in turn informed Fairhaven that he wanted the domain name so he could use it to sell properties for sale on the estate. He had stock worth about R23-million and thus “the importance and value of the domain name to him is self-evident.”
Fairhaven’s case in court was that though Harris had initially registered the name he was not the owner, but rather the registrant of the domain. The company also told the court that it had spent R1,75-million on direct advertising, all of which included the domain name and that it spent R50 000 monthly on promoting its brand via the registered domain name, while the total spent on the project was about R70-million.
If the active domain were transferred to Harris “he would have full access to all the emails on the domain and any future emails”. This would leave the company with no access to or control over any emails, in or out.
Fairhaven also argued that the domain was part of its “get up and promotional material”, developed at great expense over the last three years. The domain name appeared on “every billboard, leaflet and every document” associated with the development. It was part of the estate’s identity and of the brand’s DNA. It is “synonymous with its identity,” said Fairhaven’s lawyers.
If Harris were to obtain the name, potential clients wanting to contact the estate would in fact be redirected without their knowledge to a rival agency.
“This will result in the applicant being deprived of its customers and it would instead put (Harris) in contact with the very customers who would be seeking to do business with (Fairhaven) through its website.” In the circumstances this would amount to unlawful competition, said Fairhaven.
Harris, however, argued that he had registered all the Fairhaven domain names in his own name and had paid for their registration. He was therefore the “owner” of these names and enjoyed the exclusive right to use them. Fairhaven could not compel him to change the registered name merely on the basis that the estate had a right to protect the goodwill embodied in the website and to prevent Harris having access to the development’s intellectual capital.
The names formed part of Harris’s estate and it would be a violation of his right to property if the court were to order that he give over the names to Fairhaven.
Judge Henney said Harris had been frank that he had registered the names to help ensure he would get the mandate to sell properties in the estate at a stage when it still belonged to Nedbank.
The name was therefore inextricably linked not to Harris but to property belonging to someone else. The only connection at the time of registration between Harris and the domain names was that he was responsible for the registration of the names.
“It is irrelevant that the domain names were registered and acquired by (Harris) before Fairhaven came into existence. … It was only after (Fairhaven Estate Pty Ltd) came into existence and after it gave (Harris) the mandate to market and sell its properties, that value became attached to the domain names.”
The judge said Fairhaven had clearly established an inextricable link between the domain name and its own name, even though Harris was initially responsible for registering the domain. “It is my view that the mere registration of the domain name that was linked to the property which belonged to someone else, cannot result in having exclusive right to the use of that domain name.”
He added that Harris wanted to compete with Fairhaven to sell and market properties within the estate, and that he would be using the domain names exclusively for that purpose.
Fairhaven had shown that its business had goodwill associated with the domain name. While there had been no representation or misrepresentation “as yet” by Harris, there was a “clear intention that he intends passing off his business as being that of (the Fairhaven company).”
Judge Henney ordered that Harris could not instruct G Studio to transfer or redirect the domain names to anyone other than the development company.
Harris was further “compelled” to take all reasonable steps to ensure that the registration of the domain names was transferred to Fairhaven, with the company paying the reasonable costs of doing this.
In case Harris had any clever thoughts about registering other similar names, the judge also interdicted him from trying to register “any further domains containing the name ‘Fairhaven’ in the future”.
O, and just to make sure he gets the point, Harris will also have to pay the legal costs of the case.